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Emerging Issues Task Force (EITF) Related to Accounting for Multiple Exchange Rates - Research Paper Example
Author : terrybeau
Finance & Accounting
Pages 3 (753 words)
Emerging Issues Task Force (EITF) related to Accounting for Multiple Exchange Rates, Issue No. 10B Overview An organization was created in year 1984 by the Financial Accounting Standards Board (FASB) to offer support with timely monetary reporting. This resulted in the formation of an advisory group, which evolved into the Emerging Issues Task Force (EITF)…
The EITF was primarily intended to reduce the requirement for the FASB to spend time as well as effort addressing application, narrow implementation or other rising issues that can be analyzed within existing Generally Accepted Accounting Standards (GAAS). The various influences of EITF on the GAAS are stated in brief manner. According to EITF, in case of a business, where the period of operating cycle is in excess of twelve months, the extended period should be used for action whereas when no particular operating cycle is defined, then the one year rule should be operated. Moreover, the current liabilities are described as obligations the liquidation of which requires the use of existing resources such as current assets. Assets and liabilities, income and expenses are offsetted only when both the parties repay each other in determinable amounts and when it is accepted by law. Furthermore, EITF states website cost as an intangible asset. Thus, the accounting treatment of website depends on which purpose it is utilized, such as for internal or external use. EITF provides direction for determination of lease of an arrangement. ...